Financial Modeling in Excel test

Why are financial modeling skills important to employers?

Financial modeling skills are important to employers because they support financial performance and enable leaders to make the right business decisions to help their company grow.

Employees with good financial modeling skills can evaluate the potential impact of strategic initiatives, assess investment opportunities, and determine the organization's economic health. 

These capabilities enable better planning by providing accurate forecasts and risk assessments, which guide strategic decisions. They also ensure that companies use resources wisely, matching investments to the organization’s most pressing needs.

The best way to achieve these benefits is to use an Investment Banking Financial Modeling test to find the candidates with the right skills. Use our recruitment ROI calculator to see how much this approach can improve your hiring process.

Many financial institutions have experienced these benefits firsthand. For example, Revolut, a financial services leader, used our skills tests to create a more objective hiring process. With TestGorilla, the company managed to find better candidates and reduce hiring time by 40%. 

4 financial modeling competencies to look for

Finance companies can use our Investment Banking Financial Modeling test example to identify candidates with the right competencies to thrive in many roles. That includes the four most important financial modeling skills:

• Building and managing financial models: Proficiency in Excel and a deep understanding of economic principles enable candidates to construct and maintain complex financial models to support decision-making

• Accurately performing valuations: Understanding valuation approaches such as comparable company analysis, precedent transactions, and discounted cash flow analysis are crucial in strategic planning 

• Collecting and analyzing data: Using data analysis tools and techniques helps candidates gather relevant information from multiple sources and analyze it to identify trends, risks, and opportunities

• Creating reports: Organizing complex financial data into clear, concise reports helps present findings, recommendations, and insights to stakeholders

Create a multi-measure assessment: 4 tests to pair with the Financial Modeling test

Assessing financial modeling skills is useful but doesn't give you all the pertinent information about your candidates. To hire the right people for the job and avoid mis-hires, you should use a multi-measure approach that lets you evaluate skills, personality traits, and role-specific attributes.

With our talent assessments that contain five skills tests, you can use objective data to improve the accuracy of your hiring decisions.

We suggest combining our Financial Analyst Excel test with these four tests:

• Accounting test: Assess candidates’ intermediate accounting skills like understanding financial statements, depreciation, amortization, bookkeeping, and financial analysis, which are crucial for ensuring the accuracy of data inputs in financial modeling

• Working With Data test: Evaluate applicants’ ability to work with large datasets, interpret information accurately, and make data-driven decisions – skills that directly support transforming complex data into actionable financial strategies

• Financial Due Diligence test: Measure the ability to conduct thorough financial assessments to support financial investments and acquisitions, providing the meticulous attention to detail needed for precise financial modeling

• Culture Add test: Determine how your applicants’ values and behaviors can contribute to your company culture and teamwork, supporting the necessary collaboration across departments often required for financial modeling